As of 5 February 2023 the additional price caps have been adopted for Russian refined petroleum products. The new price caps expand UK, EU and US restrictions on the transport of seaborne Russian refined petroleum products to third countries, as well as the provision of finance, brokerage, shipping, or insurance services for such transport.
The Petroleum Products Price Cap
While the UK, EU and US (amongst others) have comprehensively prohibited the domestic import of Russian oil and oil products, the maritime transportation of Russian oil and oil products to third countries has only been prohibited if the cargo is bought above certain ‘price caps’. Our December 2022 Client Alert set out the parameters of the price cap, which came into effect on 5 December 2022 for Russian crude oil (the “Crude Oil Price Cap”).
Two further price cap levels have now been agreed for Russian petroleum products, as follows:
• “Premium-to-crude” petroleum products: US$100 per barrel
− This includes products such as diesel, kerosene and gasoline.
• “Discount-to-crude” petroleum products: US$45 per barrel
− This includes products such as fuel oil and naphtha.
These additional price caps (together, the “Petroleum Products Price Caps”) are effective as of 5 February 2023. From this date, Russian petroleum products are only exempt from sanctions restrictions on the maritime transportation of Russian petroleum products to third countries, and the provision of associated services, if they are bought at or below the Petroleum Products Price Caps.
To read this briefing in full, please select READ MORE. The December 2022 article mentioned above can be read in full HERE.Â
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